Legal Analysis

Today the Human Rights Defender Arman Tatoyan made a number of recommendations on the draft Tax Code of RA.

Taking into account the importance of the Draft for the interest of businessmen and, generally, the protection of taxpayers’ rights, the Human Rights Defender studied it.

The study concerns the current situation in the field of tax legislation, the process of public discussions on the draft Tax Code, the concerns about it among the public and professional circles, as well as concrete recommendations on the organization of the process.

Besides the above mentioned, the study also addresses the specific arrangements of the Draft, the main considerations about which are as follows:

• The Draft proposes increasing the income tax from 26% to 28% for the wages 120001-1000000 AMD. This way the income tax increases for people earning the average wage, and, as a result, the tax burden for most of the population is not reduced, but on the contrary, increases.
• The Draft stipulates that a turnover taxpayer can be the commercial entity, the entrepreneur and the notary whose sum of the turnover and other incomes for all types of activities for the previous tax year does not exceed the sum of 40 million AMD (...). In case of exceeding the specified 40 million AMD, VAT will be levied on the commercial entity, the entrepreneur and the notary. We propose to review lowering the threshold of the turnover tax rates proposed by the Draft, as the option proposed by the Draft is actually a regress in the context of both current regulations, and of the legislation in force till 2014.
• According to the Draft for the violation of tax legislation taxpayers or tax agents are subject to tax liability solely pursuant to the Code and on the basis and order defined by RA laws on payments. Whereas in the RA Code on Administrative Offences there are a number of similar violations in case of which administrative liability is applied. We recommend that for the violation of tax legislation by taxpayers and tax agents the tax liability be specified in such a way that the possibility of being subject to double liability conditioned by the legal status of the person before the law who is subject to tax and administrative liability be excluded.
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All the recommendations of the Human Rights Defender on the draft law can be found here.

An application signed by 1255 residents of the villages Koti, Voskepar, Barekamavan of the Tavush Province was addressed to the Human Rights Defender with the request to provide an expert opinion on the process of enlargement of the communities, including the amendments to the RA Law “On Administrative-Territorial Division of the Republic of Armenia”. According to the application, the process of initiating amendments to the above-mentioned law by the Government was carried out with violations.

Based on the application the Human Rights Defender carried out a comprehensive legal analysis within his jurisdiction. The legislative regulations in this sector, the practice of their practical realization, as well as the professional publications and discussions in the mass media, the concerns of the residents served as a source of the analysis. The clarifications of the Standing Committee on Territorial Administration and Local Self-Government of the National Assembly of RA and the Ministry of Territorial Administration and Development of RA were taken into account. The international standards and the relevant experience of foreign countries were analyzed.

The main conclusions and recommendations of the analysis are:

• International experience shows that the process of enlargement of the communities in general can contribute to overcoming a lot of challenges in the country, including solution to problems such as the low quality of services provided to the population of the community, underdeveloped infrastructures and the shortage of funds provided to the communities, the dependence of the communities on the grants and subsidies provided by the central government, etc.
• The necessary preconditions for the unification or separation process of the communities are the completion of the process considering the public interest and taking into account the opinion of the population of the community.
• It is unacceptable that the expansion of the volume of the process of enlargement of the communities in Armenia was carried out in conditions of lack of public awareness and absence of a positive public perception. Such undue haste could in practice undermine the consistent realization of the process and become the cause of omissions and shortcomings in key issues thus not ensuring the realization of the government-approved conceptual provisions and expected vision.
• It is troubling that the latest legislative changes concerning the enlargement of the communities were initiated in conditions of absence of the results of the pilot program aimed at the phasic, gradual realization of the process. In any case, there are no official public and available comprehensive explanations and publications on the implementation of the pilot program. This is also the reason that the residents of the interested communities have no confidence in the process.
• The successful realization of the process of the enlargement of the communities is possible through proper public participation in the process and ensuring the rights to be informed. It is necessary to ensure the openness and transparency of the process, as well as the ensuing certainty and predictability. The content of the constitutional requirement to listen to the opinion of the community cannot be limited by an autotelic listening to the opinion of the communities, without any legal consequences.
• In order to ensure the above-mentioned requirements it is necessary to set a public timetable and based on that - make discussions in all possible cases involving representatives of mass media as well. These discussions should be made in separate stages and should be especially designed for the wide layers of the residents of the communities and for the target groups directly affected by the results of the process.
• The above-mentioned requirements of the process of the enlargement of the communities must be provided so that resident of the community is able to directly feel the exhaustive and actual effect of the enlargement.